Australia is still an attractive market for international brands including Aldi with new arrivals expected this year according to Deloitte. Photo: Louise Kennerley

Deloitte's annual retail report, the Global Powers of Retailing reveals 39 of the world's top 250 retailers are currently open for business in Australia and among the competitive grocery sector both Aldi and Costco plan store expansions.

South African fashion label Mr Price launched MPR in Australia late last year (the operation's first venture outside of South Africa) and the newly launched Zara Home plans more store openings this year, as does Cosmetics giant Sephora.

US-owned retailers dominate the Australian retail market, accounting for close to half, with French retailers accounting for the next biggest tranche with a 13 per cent share.

Deloitte partner David White said the Australian market was in relative terms "unsaturated" by the world's biggest retail brands and China was conspicuous in its absence given the huge volume of Chinese-produced merchandise of sale in Australia.

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Mr White said China had nine of the top 250 retail brands, including Alibaba and JD.com but Chinese retailers had not yet directly entered the Australian market.

"At the moment the strength is around online retail in China, their two biggest retailers are both online performers, Alibaba and JD.com and those retailers are also in the top 50, fastest growing retailers globally," Mr White said.

He said the likelihood these Chinese retailers would expand into physical stores in Australia was the "next logical step."

"The advantage of coming to a country like Australia is it's not a huge market so the investment wouldn't be as high if they were looking at Europe and the US and geographically it's close as well," Mr White said.

The international supermarket operators in Australia are both planning to open new stores in 2016 and the talk of Lidl's planned launch just won't go away.

German discount giant Aldi is driving a major store expansion in South Australia and Western Australia and is expected to add 65 new stores in 2016 and US member-based retailer Costco plans to open three new outlets.

In addition to these new store openings, there is persistent talk Lidl has designs on the Australian market.

"The competitive landscape in grocery is just increasing but the unknown from an Australian perspective is whether Lidl will come into the market," Mr White said.

"There is a general view that there probably is enough room for someone like Lidl to enter the market and if they do we expect to see what we see in Europe, which is huge amounts of competition which has really driven down prices."

The only threat to this international invasion is house prices in the dominant Sydney and Melbourne markets but retail analysts report the strong shopper sentiment that drove strong Christmas sales has continued into the new year.

Deloitte's research suggests more than 80 per cent of the Australian retailers it canvassed expect earnings to increase in 2016 and more than 40 per cent of these brands are forecasting this growth to exceed 5 per cent.

Retail sales to November 2015 were up by 4 per cent, however Deloitte warns that low interest rates and strong housing market can't support retail forever, particularly when overall wage growth is barely keeping pace with inflation.